For immediate release – Thursday, December 13, 2007.
Contact Bob Brammer – 515-281-6699.
$2.6 Million On Its Way to Iowa Ameriquest Customers
Checks are going out now to 2,965 Iowa households in the largest Iowa consumer restitution in history.
Miller also encourages Iowans to call the Iowa Mortgage Foreclosure Hotline if they are at risk of foreclosure.
Des Moines. Attorney General Tom Miller said today that checks totaling $2,622,544.99 are being sent Thursday and Friday to 2,965 Iowa households as part of the state’s settlement with Ameriquest Mortgage Company in one of the largest sub-prime mortgage predatory lending cases.
The consumer restitution of over $2.6 million is the largest in Iowa history.
“The checks are in the mail,” Miller said. “If you receive a letter from the Ameriquest Settlement Administrator, don’t discard it thinking it is junk mail,” he advised. Payment checks will average about $884 each, and will range from $159 to $3,389.
Miller was the lead state attorney general in the nationwide case against Ameriquest Mortage Company which was resolved last year with Ameriquest agreeing to pay $295 million to consumers nationwide and make sweeping reforms of practices the states alleged amounted to predatory lending.
The states alleged that Ameriquest employees deceived consumers as part of high-pressure tactics to sell mortgage refinancings. They said high-pressure sales tactics were used to reach desired sales levels and high monthly individual sales quotas.
“Now we are getting money back to consumers,” Miller said. He said checks are being issued Thursday and Friday, and that consumers should give them at least a week to ten days to arrive. After that, he advised consumers with questions to contact the Ameriquest Settlement Administrator, which was responsible for handling the claims and payment process, by going to www.ameriquestsettlement.com or calling 800-420-5875.
“We alleged that Ameriquest engaged in unfair and deceptive practices that harmed consumers,” Miller said. “This is a landmark agreement that changed Ameriquest’s practices and set standards we expect other mortgage lenders to follow.”
Miller said the $325 million nationwide total Ameriquest payment ranks as the second-largest state or federal consumer protection settlement in history, after the $484 million predatory lending agreement reached in 2002 between most states and Household Finance Corporation, another multi-state investigation and settlement led by Miller. Iowa consumers received about $1.3 million in the Household case. In another case, 113,000 Iowans received a total of almost $1.6 million in refunds in 2004 from the CD compact disc antitrust case.
Iowa Mortgage Foreclosure Hotline
Miller also reminded Iowans who may be facing a mortgage foreclosure by any lender to call the Iowa Mortgage Foreclosure Hotline at 877-622-4866 (toll-free). The Hotline was established by Miller and the Iowa Mediation Service in September.
The Hotline aims to help borrowers and lenders determine if loan terms can be modified so that borrowers can make payments – and keep their homes – and lenders can do much better financially than if they foreclosed on a mortgage.
The Hotline, which is run by the Iowa Mediation Service, will take information from borrowers and then explore if a loan modification might work for both the borrower and lender.
“The Hotline has had almost 5,000 calls in just its first three months, and the Mediation Service has opened about 500 cases,” Miller said. “It makes sense for consumers to try this. It won’t work in every case, but when it works, it will be a win for all. Payments continue to lenders. Borrowers remain in their homes. Neighborhoods stay much stronger. We all benefit.”
Mike Thompson, Director of Iowa Mediation Service, urged Iowans to call the toll-free Iowa Foreclosure Hotline (877-622-4866) if they are in default or foreclosure, or if they think they can’t afford new higher payments when an adjustable rate moves up.
“The earlier people call, the better,” Thompson said. “We will ask people to gather and provide their full financial information. We don’t want people to ignore the problem.”
Miller also has organized an eleven-state task force to meet with mortgage servicing companies and investors to find ways for them to modify more troubled subprime loans instead of foreclosing. He said the national effort paralleled the Iowa project because it is driven by the principle that borrowers, lenders, investors, and mortgage servicing companies all have an interest in avoiding foreclosure. “We are appealing to everyone’s enlightened self-interest,” Miller said.
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